The Right Road on Regulation

Regulation is like the weather. Everyone likes to complain, but nobody does anything about it.

That’s not true, however, of the House of Representatives, which today passed a fistful of reforms. The package is hardly the stuff of revolution, and few of the proposals will make their way on to bumper stickers. But they shouldn’t be dismissed lightly. While modest in scope, they represent common-sense changes that promise to help restrain the growing burdens of red tape. (Video of Rep. Mike Kelly’s passionate speech is embedded.)

There is little doubt that the regulatory costs have been growing in recent years, and growing fast. According to a Heritage Foundation analysis, 106 major new regulations — each imposing $100 million or more in new costs on the economy — were adopted in the first three years of President Obama’s tenure. That compares to 28 during the first three years under President Bush.

In dollar terms, the acceleration is even starker, with $46 billion in new burdens being assessed under Obama, compared to $8 billion in the three years following President Bush’s inaugural.

The package of reforms in the House would take a number of approaches to stemming this rising tide of red tape. The headline proposal is a regulatory freeze — banning adoption of new major regulations until the national unemployment rate dips below 6 percent.

A freeze is no cure-all, of course. Past freezes, such as the one imposed by the first President Bush in 1991, had little long-term impact. High-profile rules tend to get waivers, and even those stopped by the freeze tend to be adopted as soon as it is lifted. But it is important symbolic move, sending the message to regulators that now is not the time for new restrictions on the economy.

The freeze, though, is only one among many reforms before the House. Among the others:

• Limiting “midnight” regulations. As a presidential administration comes to a close, the number of new rules adopted by regulators invariably skyrockets. It doesn’t matter whether the president is a Republican or Democrat, liberal or conservative — policymakers, freed from normal political constraints, rush to clear their desks and put their pet ideas into effect while they can. The result is a glut of new restrictions, hastily considered with limited accountability.

The House bill would limit this periodic circus, banning promulgation of new rules after Election Day whenever the Presidency changes hands. Even better, accountability could be maintained by requiring Congress’ approval of new regulations, as proposed under legislation approved by the House last year.

• Making regulatory settlements transparent. A significant number of new regulations are imposed under court order with regulators seemingly having little choice but to promulgate the new rule. In many cases, however, such court orders are not the result of an adversarial process lost by the agency, but rather the product of an elaborately staged kabuki dance among outside pressure groups, the courts, and the agency itself.

This “sue and settle” process is simple: an interest group sues a regulatory agency, the agency takes a dive and settles the case, resulting in a court order requiring the agency to do what it wanted to do in the first place. The House bill would not end this practice, but would require more transparency in the process, including an opportunity for public comment to the agency before any settlement is agreed to.

• Requiring cost/benefit analyses. These would be conducted by the Securities and Exchange Commission and Commodities Futures Trading Commission. For more than 30 years, executive branch agencies have been required to assess the benefits and costs of major new rules. This requirement does not apply, however, to so-called “independent” agencies, which are outside direct presidential control. The House legislation would require, by statute, two of the most significant independent agencies to conduct such analyses before adopting new rules.

These reforms are sensible, common-sense improvements to the regulatory process. Combined with other, broader reforms already approved by the House, they represent a major step toward limiting the regulatory burden on the economy and American consumers.

The next stop for the legislation is the Senate, where — unfortunately — it is expected to receive a chilly reception. But that weather forecast could always change.

Join The Discussion

the more red tape the more evident distrust. Isn't it even more evident the democratic party and the like minded do not want America to stand for her founding? Obstructing her every possible effort to recover and have no use or respect for her human decencies and civilities here or around the world?

Thank you kindly, Rep Kelly!

If there was any nation in the world that shows respect for all people, America is the first through her indiscriminate civil law regardless of her outcome within the control of her opposing forces who infiltrated by self victimization, taking advantage of America as advantage is all cheap, low life, cons get.

Being an elected representative is a call to duty to serve the American people. Thank you Rep. Kelly for showing your colleagues how it’s done. As a retired Navy officer and small business owner, I am running for Congress in Hawaii D2, and will stand alongside Rep. Kelly to fight for commonsense leadership that puts the people first. Career politicians are destroying this country. I stand on “Responsible Leadership, Not Politics.” Mike Kelly is my role model.

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